Russia, Iraq Plan Deal to Bolster Ties
Economic Pact May Complicate U.S. Action Against Baghdad
By Peter Baker
Washington Post Foreign Service
Saturday, August 17, 2002; Page A01
MOSCOW, Aug. 16 -- Russia and Iraq plan to sign a new five-year economic cooperation agreement worth $40 billion, reinforcing Moscow's close ties to Baghdad even as the United States weighs a military attack to drive Iraqi President Saddam Hussein from power, Iraqi and Russian officials said today.
Russia's apparent refusal to abandon its longtime ally, despite vigorous U.S. efforts to isolate Iraq, could make it even more difficult for the United States to rally Russian and other skeptical world leaders behind any invasion.
The five-year agreement will deal with cooperation in a variety of fields -- foremost oil, but also electrical energy, chemical products, irrigation, railroad construction and transportation, according to officials here. Soviet or Russian specialists built much of the infrastructure in Iraq, and so Baghdad wants Russian expertise to help repair or upgrade it.
Russia has continued to strengthen ties with all three of the countries branded the "axis of evil" by President Bush: Iran, Iraq and North Korea. Despite President Vladimir Putin's friendship with Bush and support for the war on terrorism, Moscow last month released a separate plan calling for increased nuclear cooperation with Iran and this week invited North Korea's leader to visit Russia.
Russia plays a particularly important role in the future of Iraq. Russia has long been one of Iraq's chief benefactors in the international arena and a major trading partner and military supplier. But Bush aides have expressed hope that the United States could mollify Putin enough to keep protest to a minimum in the event of war.
For its part, Iraq has been lobbying hard to keep Russia in its corner, recognizing the dearth of friends that will stand up for it in a moment of crisis. Few countries have more significant economic interests in Iraq than Russia, totaling billions of dollars both in the form of unpaid Soviet-era debts and unrealized post-Soviet oil contracts.
"Russia was, is and will be our main partner," said Abbas Khalaf, Iraq's ambassador here. "What we need from Moscow is moral, political and diplomatic support because Iraq has shown the whole world that it can defend itself. America's aggressive statements against Iraq aroused negative reaction in Russia."
Khalaf scoffed at recent speculation that Moscow has privately signaled Washington that it would not seriously object to an attack on Iraq. Russia, he predicted, would do everything it could to stop a war.
"We're sure of it because Russia is a country which supports peace and stability in the whole world," he said. "It has a moral responsibility to prevent such aggressive plans against Iraq."
Khalaf, a high-ranking Foreign Ministry official and Hussein's personal translator, was dispatched to Moscow as the new envoy a month ago and has been making the rounds here to solidify the Russian political establishment behind Iraq. He disclosed the planned economic agreement in an interview today at the embassy in central Moscow and senior Russian officials confirmed it.
Oleg Buklemeshev, a top deputy to Prime Minister Mikhail Kasyanov, confirmed that after years of negotiations the "framework" has been vetted by various government agencies and sent to his boss's office for final approval. "All the ministries have agreed to the document," he said in an interview. As for a signing ceremony, he said, "It could happen very soon."
But Buklemeshev stressed that nothing in the economic program would violate U.N. sanctions imposed on Iraq after its 1990 invasion of Kuwait and said that no arms would be involved. "I can assure you it's absolutely in line with all the existing international decisions toward Iraq," he said. U.S. officials should not object, he added. "They should be okay provided they have correct information."
Under U.N. resolutions, Iraq can sell only limited amounts of oil each year to pay for food and medicine and rebuild the country's infrastructure. The sanctions are supposed to remain in place until U.N. inspectors certify that Iraq has eliminated its efforts to obtain nuclear, chemical and biological weapons. But Baghdad threw out the inspectors in 1998.
U.N. and Iraqi officials have jousted recently over readmitting inspectors. Russia has encouraged a resolution of the issue that would forestall a U.S. military attack.
As long as the sanctions remain in place, Russian oil companies cannot proceed with their most ambitious plans to develop Iraqi oil fields. However, Russia gets the largest share of the petroleum sold under the U.N. oil-for-food program and overall still does about $4 billion in business a year with Iraq.
Just Thursday, Russia proposed changes in the pricing rules in the oil-for-food program that it argued have penalized Baghdad and discouraged oil sales. Russian diplomats pushed for a special session of the U.N. Security Council's committee on Iraq sanctions to consider the issue.
Russia and Iraq have concluded a number of economic deals that have only sometimes come to fruition.
State Department officials in Washington said they were unaware of the pending agreement and expressed hope it would remain within limits imposed by the U.N. sanctions. "Russia is a Security Council member and knows full well their obligations under U.N. Security Council resolutions," a senior State Department official said. "But we are not aware of any particular agreement."
Some Russian oil executives expressed doubt that the agreement could amount to much, given the international political climate. "We couldn't broaden our relationship with a regime that has a policy like that," said one oil company official who did not want to be identified.
At the same time, many of the oil executives were clearly eager for the chance to pursue more opportunities. Several asked how much money the new blueprint might mean for their companies.
Regardless of the economics, the symbolism of a signing ceremony could irritate U.S. officials. Iraqi and Russian officials said the ceremony likely would take place in the next two weeks in Baghdad and involve cabinet-level officials, such as Iraq's oil minister and Russia's energy minister. Iraq had hoped Kasyanov might come, but his aide, Buklemeshev, said he did not think the prime minister would participate.
"Without question, there will be a big ceremony," said Khalaf, the Iraqi ambassador. "Just recently, they informed me that it will be at the end of August." Iraqi officials want to hold it in Baghdad, he added, as a way for the Russians to show "moral support."
The disclosure of the economic agreement with Iraq follows the release of a Russian blueprint for expanding ties with neighboring Iran as well. That document, signed by Kasyanov, envisioned Russia building five additional civilian nuclear reactors in Iran in addition to the one already under construction at Bushehr. Top Bush aides complained to Russian officials that such cooperation could help Iran develop nuclear weapons.
Economic Pact May Complicate U.S. Action Against Baghdad
By Peter Baker
Washington Post Foreign Service
Saturday, August 17, 2002; Page A01
MOSCOW, Aug. 16 -- Russia and Iraq plan to sign a new five-year economic cooperation agreement worth $40 billion, reinforcing Moscow's close ties to Baghdad even as the United States weighs a military attack to drive Iraqi President Saddam Hussein from power, Iraqi and Russian officials said today.
Russia's apparent refusal to abandon its longtime ally, despite vigorous U.S. efforts to isolate Iraq, could make it even more difficult for the United States to rally Russian and other skeptical world leaders behind any invasion.
The five-year agreement will deal with cooperation in a variety of fields -- foremost oil, but also electrical energy, chemical products, irrigation, railroad construction and transportation, according to officials here. Soviet or Russian specialists built much of the infrastructure in Iraq, and so Baghdad wants Russian expertise to help repair or upgrade it.
Russia has continued to strengthen ties with all three of the countries branded the "axis of evil" by President Bush: Iran, Iraq and North Korea. Despite President Vladimir Putin's friendship with Bush and support for the war on terrorism, Moscow last month released a separate plan calling for increased nuclear cooperation with Iran and this week invited North Korea's leader to visit Russia.
Russia plays a particularly important role in the future of Iraq. Russia has long been one of Iraq's chief benefactors in the international arena and a major trading partner and military supplier. But Bush aides have expressed hope that the United States could mollify Putin enough to keep protest to a minimum in the event of war.
For its part, Iraq has been lobbying hard to keep Russia in its corner, recognizing the dearth of friends that will stand up for it in a moment of crisis. Few countries have more significant economic interests in Iraq than Russia, totaling billions of dollars both in the form of unpaid Soviet-era debts and unrealized post-Soviet oil contracts.
"Russia was, is and will be our main partner," said Abbas Khalaf, Iraq's ambassador here. "What we need from Moscow is moral, political and diplomatic support because Iraq has shown the whole world that it can defend itself. America's aggressive statements against Iraq aroused negative reaction in Russia."
Khalaf scoffed at recent speculation that Moscow has privately signaled Washington that it would not seriously object to an attack on Iraq. Russia, he predicted, would do everything it could to stop a war.
"We're sure of it because Russia is a country which supports peace and stability in the whole world," he said. "It has a moral responsibility to prevent such aggressive plans against Iraq."
Khalaf, a high-ranking Foreign Ministry official and Hussein's personal translator, was dispatched to Moscow as the new envoy a month ago and has been making the rounds here to solidify the Russian political establishment behind Iraq. He disclosed the planned economic agreement in an interview today at the embassy in central Moscow and senior Russian officials confirmed it.
Oleg Buklemeshev, a top deputy to Prime Minister Mikhail Kasyanov, confirmed that after years of negotiations the "framework" has been vetted by various government agencies and sent to his boss's office for final approval. "All the ministries have agreed to the document," he said in an interview. As for a signing ceremony, he said, "It could happen very soon."
But Buklemeshev stressed that nothing in the economic program would violate U.N. sanctions imposed on Iraq after its 1990 invasion of Kuwait and said that no arms would be involved. "I can assure you it's absolutely in line with all the existing international decisions toward Iraq," he said. U.S. officials should not object, he added. "They should be okay provided they have correct information."
Under U.N. resolutions, Iraq can sell only limited amounts of oil each year to pay for food and medicine and rebuild the country's infrastructure. The sanctions are supposed to remain in place until U.N. inspectors certify that Iraq has eliminated its efforts to obtain nuclear, chemical and biological weapons. But Baghdad threw out the inspectors in 1998.
U.N. and Iraqi officials have jousted recently over readmitting inspectors. Russia has encouraged a resolution of the issue that would forestall a U.S. military attack.
As long as the sanctions remain in place, Russian oil companies cannot proceed with their most ambitious plans to develop Iraqi oil fields. However, Russia gets the largest share of the petroleum sold under the U.N. oil-for-food program and overall still does about $4 billion in business a year with Iraq.
Just Thursday, Russia proposed changes in the pricing rules in the oil-for-food program that it argued have penalized Baghdad and discouraged oil sales. Russian diplomats pushed for a special session of the U.N. Security Council's committee on Iraq sanctions to consider the issue.
Russia and Iraq have concluded a number of economic deals that have only sometimes come to fruition.
State Department officials in Washington said they were unaware of the pending agreement and expressed hope it would remain within limits imposed by the U.N. sanctions. "Russia is a Security Council member and knows full well their obligations under U.N. Security Council resolutions," a senior State Department official said. "But we are not aware of any particular agreement."
Some Russian oil executives expressed doubt that the agreement could amount to much, given the international political climate. "We couldn't broaden our relationship with a regime that has a policy like that," said one oil company official who did not want to be identified.
At the same time, many of the oil executives were clearly eager for the chance to pursue more opportunities. Several asked how much money the new blueprint might mean for their companies.
Regardless of the economics, the symbolism of a signing ceremony could irritate U.S. officials. Iraqi and Russian officials said the ceremony likely would take place in the next two weeks in Baghdad and involve cabinet-level officials, such as Iraq's oil minister and Russia's energy minister. Iraq had hoped Kasyanov might come, but his aide, Buklemeshev, said he did not think the prime minister would participate.
"Without question, there will be a big ceremony," said Khalaf, the Iraqi ambassador. "Just recently, they informed me that it will be at the end of August." Iraqi officials want to hold it in Baghdad, he added, as a way for the Russians to show "moral support."
The disclosure of the economic agreement with Iraq follows the release of a Russian blueprint for expanding ties with neighboring Iran as well. That document, signed by Kasyanov, envisioned Russia building five additional civilian nuclear reactors in Iran in addition to the one already under construction at Bushehr. Top Bush aides complained to Russian officials that such cooperation could help Iran develop nuclear weapons.
